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Shelby County Health Care Corp. v. Southern Farm Bureau Casualty Insurance Co.

United States Court of Appeals, Eighth Circuit

April 28, 2017

Shelby County Health Care Corporation, doing business as Regional Medical Center, Plaintiff- Appellant,
v.
Southern Farm Bureau Casualty Insurance Company; Medford Farm Partnership; Aaron Medford; Barbara Ford, as Special Administratrix of the Estate of John Dallas Smiley, Defendants-Appellees.

          Submitted: September 20, 2016

         Appeal from United States District Court for the Eastern District of Arkansas - Jonesboro

          Before COLLOTON, MELLOY, and SHEPHERD, Circuit Judges.

          COLLOTON, Circuit Judge.

         Shelby County Health Care Corporation, doing business as Regional Medical Center ("The Med, " for short), seeks relief for alleged impairment of a hospital lien. The district court dismissed The Med's claim on the ground that it was barred by the Rooker-Feldman doctrine and, alternatively, that it failed under Arkansas law. We conclude that the claim is not barred by Rooker-Feldman, and that Tennessee law should apply, so we vacate the district court's order and remand for further proceedings.

         I.

         The hospital lien in question arose from treatment that John Smiley received at The Med in Memphis, Tennessee, from February 18, 2009, when he was involved in an automobile accident, until March 6, 2009, when he died of his injuries. The Med promptly filed a hospital lien for Smiley's medical bills pursuant to the Tennessee Hospital Lien Act in the Shelby County Circuit Court in Tennessee. Tenn. Code Ann. § 29-22-101. The Med mailed a copy of the hospital lien to the attorneys for Smiley's estate.

         Barbara Ford was appointed administrator of Smiley's estate by an Arkansas circuit court. Ford negotiated a settlement with the tortfeasor's insurer, Southern Farm Bureau Casualty Insurance Company. As part of the settlement negotiations, Ford sent to the insurer Smiley's hospital bill and records from The Med documenting Smiley's pain and suffering. The insurer, along with its insured Aaron Medford, and Medford's employer Medford Farm Partnership, settled with Ford for $700, 000. The administrator of the estate allocated the entire $700, 000 to recovery for wrongful death and none to the recovery of compensatory damages for medical services and other expenses.

         In September 2010, the settling parties (which did not include The Med) memorialized the agreement in an Arkansas probate court judgment that purported to extinguish any outstanding liens. The Med learned of the probate court judgment by April 2011, but did not seek to intervene in the proceedings. The probate court closed Smiley's estate on September 16, 2011.

         The Med sued the settling parties to recover $355, 364.16 in damages for the impairment of its hospital lien. The district court granted summary judgment for the defendants on the ground that The Med failed to enforce its lien by neglecting to file it in the Arkansas probate court. The Med appealed, and this court reversed, concluding that the district court misconstrued The Med's claim as one for lien enforcement rather than lien impairment. Shelby Cty. Health Care Corp. v. S. Farm Bureau Cas. Ins. Co., 798 F.3d 686, 689 (8th Cir. 2015). We remanded for the district court to address, among other questions, whether Arkansas law or Tennessee law applied to The Med's lien impairment claim. Id. at 689-90.

         On remand, the district court again granted summary judgment for the settling parties. The court first ruled that the Rooker-Feldman doctrine barred The Med's claims. See D.C. Court of Appeals v. Feldman, 460 U.S. 462 (1983); Rooker v. Fid. Tr. Co., 263 U.S. 413 (1923). Alternatively, the court reasoned that Arkansas's choice-of-law rules called for the application of Arkansas law, and that The Med's claim failed under Arkansas law. The court concluded that The Med did not properly perfect its lien under Arkansas law, and that even if the lien were perfected, it would be unenforceable because Arkansas law prevents a hospital lien from attaching to a wrongful death recovery.

         II.

         We consider first the district court's ruling that it lacked jurisdiction. In concluding that The Med's claim "appears to be barred by the Rooker-Feldman doctrine, " the district court reasoned that "[t]o now find that there was a valid, enforceable lien would effectively reverse the decision made by the Arkansas probate court." The court explained that the probate court found that The Med's lien was void and not enforceable in Arkansas, while The Med now alleges that the defendants impaired a valid lien.

         The Rooker-Feldman doctrine is confined to "cases brought by state-court losers complaining of injuries caused by state-court judgments rendered before the district court proceedings commenced and inviting district court review and rejection of those judgments." Exxon Mobil Corp. v. Saudi Basic Indus. Corp., 544 U.S. 280, 284 (2005). The doctrine does not apply here, because The Med was not a "state-court loser." The Med was not a party to the state-court probate proceedings. Whatever narrow application the Rooker-Feldman doctrine might have to de facto appeals by non-parties is not germane here, where The Med has no relationship to the parties in probate court. Cf. Lance v. Dennis, 546 U.S. 459, 466 n.2 (2006) (per ...


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